Tag: stock allocations
Introduction While Social Security provides those ages 62 and older with a predictable stream of income, most households need other resources as well for a secure retirement. The bulk of these other resources come from employer-sponsored retirement plans, although more affluent households may save additional amounts on their own. With the shift from traditional defined…
Abstract A substantial literature has developed models of optimal consumption and asset allocation based on the assumption that stocks and bonds have fixed returns, with normal independent, identically distributed disturbances. Households optimally rebalance from stocks to bonds as they age, reflecting the declining proportion of their wealth that is represented by low-risk human capital. Using…
